Food Subsidies in Egypt

Abstract

The Egyptian government subsidizes a very wide range of commodities and services, among them food. The subsidy system is well-established, having begun in the 1950s, but only during the 1970s did it expand to a substantial share of public spending. Along with economic importance, the political and nutritional consequences of the subsidies have waxed in recent years. A general sketch of these developments is all that can be presented in this brief survey chapter, along with some indication of how proposed changes in the subsidy system might affect the economic and nutritional well-being of poor Egyptians.

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Notes

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The Egyptian pound (£E) is currently worth U.S. $1.43. It has been devalued through a series of parallel rates from a 1973 value of U.S. $2.56.Google Scholar

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An exception to this generalization is the increase in subsidies for meat in recent years. The food consumption patterns given in the text imply that the income elasticity of demand for meat products (and also dairy products and fats and oils) is close to one. As such, meats are not an ideal target for a good subsidy, which ought to concentrate on products with relatively high demand elasticities for the poor and low ones for the better-off. The nutritional cost-effectiveness of the subsidy system may therefore have declined in light of recent trends.Google Scholar